Thursday, September 01, 2016

George Leef of Forbesreports
that unaccountable bureaucrats at the SEC are preparing to saddle
corporate boards with demographic quotas:

Back in 2009, the
SEC instituted a requirement that publicly traded companies disclose
plans they might have regarding the diversity of their boards of
directors. That is to say, the racial, ethnic and gender
characteristics of board members -- as if those attributes were the
essential, defining attributes of a person.

But now SEC
Chairman Mary
Jo White has concluded that the earlier rule was too soft, leading
only to vague disclosures about board diversity. As we learn
in this Wall
Street Journal editorial, she wants a new rule mandating that
firms "include in their proxy statements more meaningful board
diversity disclosures on their members and
nominees."

Chairman White's idea dovetails with the
thinking of Canadian law professor Aaron Dhir, who has been crusading
for rules to compel companies to consider "the socio-demographic
composition of their boards" and of Representative Carolyn Mahoney of
New York, who wants the SEC to force companies to identify each member
of their boards according to gender, race, and ethnicity. [links in
original]

Leef goes on to indicate, correctly that rules
about the demographic composition of corporate boards would "push
[companies] into poor decisions" and fail at truly mimicking our
nation's diversity, anyway. In addition, he echoes George Will's
admonitions some time ago about bureaucratic
autonomy.

These things are all true, but the real problem is that
it is wrong for the government to violate the rights of the
individuals (e.g., who own and run businesses) to make their own
decisions about whom to work with. Were we to constrain the government
to its proper function, we wouldn't have to worry about it making
companies obsess over every characteristic but the relevant one --
ability -- when making personnel decisions.